The New Upwell Line Of Hauling Ships In Equinox

On Tuesday CCP published another in its Equinox in Focus videos and news posts. For those who need a Suitonia fix, the player now known as CCP Kestrel provided the narration of the video.

The new ships coming in the summer expansion are pirate haulers. That's right, I went there. The Upwell Consortium, until I hear different, is a pirate faction just like the Sisters of EVE.

The purpose of the new ship line is to support Upwell's Equinox suite of products for null sec living.

Each of these vessels is equipped with a large infrastructure hold, able to store various items essential for owning and upgrading sovereign space. This includes the new orbital skyhook, Metenox moon drill, sovereignty structures and upgrades, as well as other Upwell structures, resources, deployables, and more. Despite their primary role as industrial ships, all four boast considerable missile firepower for their size, allowing them to deter potential aggressors keen on plundering their valuable cargo. Two new skill books are being added to go with the specialized nature of these ships: Upwell Hauler and Upwell Freighter. These can be acquired at Upwell Consortium NPC stations.

When looking for where Upwell Consortium stations are on Dotlan, I discovered Upwell Consortium was a one person alliance active from 22 August 2016 to 22 September 2016. But as of now, a search for Upwell Consortium in the game only brought up three specialty items.

Back to the ships. The most basic ship is the Squall. A tech 1 hauler, the ship has a 4/5/3 layout with skill bonuses to infrastructure hold capacity and missile damage. The role bonus dramatically reduces effective distance traveled for jump fatigue. Lore-wise, I think the role bonus makes sense. One might think the designers of the Ansiblex Jump Gate to not only know some advanced theory but then seek to profit further from the knowledge.

The Upwell sales pitch for the Squall somehow found its way into the news article.

Starting with the Squall, this ship serves as an affordable entry-level hauler, ideal for transporting infrastructure and reagents. Priced slightly above a Tech I cruiser hull, the Squall offers comparable cargo capacity, hit points, and defensive capabilities, enabling it to fend off smaller aggressors or participate effectively in larger fleet operations, such as skyhook raids.

Next up is the Deluge. A blockade running version of the Squall, the Deluge boasts a 4/4/2 layout with the typical 2 rigging slots of a tech 2 ship. I'm going to lay out the bonuses for the ship in bullet point form.

• Upwell Hauler skill bonuses:
• infrastructure hold capacity
• missile damage
  
  
• Transport Ship skill bonuses: 
• warp speed
• warp acceleration
• reduction in cloaking device CPU requirements
  
  
• Role Bonuses: 
• reduces effective distance traveled for jump fatigue
• allows the fitting of covert ops cloaking devices
• allows the fitting of a covert cynosural field generator
• immunity to all cargo scanners
• cloak reactivation delay reduction

Upwell does have a sales pitch, if one is needed. Perhaps the numbers won't be so great.

The Deluge, a Tech II variation of the Squall, trades some cargo capacity and missile firepower for enhanced stealth capabilities, including the use of a covert ops cloaking device. Its improved mobility and warp speed make it the perfect choice for maintaining your infrastructure on the fringes of your space or operating behind enemy lines.

If a ship line has a blockade runner, then a deep space transport is also called for. In Equinox, that tech 2 ship is the Torrent. The ship's 4/6/3 layout does not leave a lot of room for cargo expanders but does allow the fitting of three missile launchers. Instead, the ship has a large quantity of skill and role bonuses.

• Upwell Hauler skill bonuses:
• infrastructure hold capacity
• missile damage
  
  
• Transport Ship skill bonuses: 
• increase fleet hangar capacity
• increase shield resistances
  
  
• Role Bonuses: 
• reduces effective distance traveled for jump fatigue
• increase warp core strength (probably by +2)
• doubles the benefits of overheating modules

The sales pitch also lists an interesting capability not mentioned in the bonuses: energy neutralizers.

Its big brother, the Torrent, is another Tech II variation of the Squall. It sacrifices some agility and speed for increased hit points, a larger infrastructure hold, more firepower, a fleet hangar, and substantial bonuses to overheating defensive and propulsion modules, as well as energy neutralizers. This ship is ideal for operations in high-threat environments where both capacity and survivability are paramount.

Finally I did not expect a new freighter, but the Upwell Consortium is providing one. The Avalanche not only is specialized, but has high slots. A freighter than can fight back? The slot layout of the new freighter is 6/3/3 with the ability to fit 6 (!) missile launchers.

• Upwell Freight skill bonuses:
• infrastructure hold capacity
• missile damage
• auto-missile damage
  
  
• Role Bonuses:
• reduces effective distance traveled for jump fatigue
• reduces capital flex shield hardener capacitor activation cost
• reduces capital flex shield hardener capacitor powergrid requirements

And what is an Upwell product reveal without the sales pitch?

The pinnacle of this new fleet is the Avalanche, an immense freighter that not only carries a vast amount of resources but is also the first freighter in EVE Online to feature high-power slots, with enough missile firepower to match most battleships. Unique among freighters, the Avalanche can equip capital shield flex hardeners and benefits from an enhanced bonus to auto-targeting missiles, making it a formidable presence in any logistic or combat scenario.

Corporation and alliance logistics is important, but also a niche market. In order to appeal to a broader audience, they made what the ship can carry more versatile.

To ensure that these ships appeal not only to major corporations but also to individual industrialists, the infrastructure hold has been expanded to accommodate everything necessary for larger and smaller industry tasks. This includes a wide range of materials, such as fuel and planetary commodities, making these vessels an excellent choice for pilots seeking a superior alternative to the Epithal for carrying out their Planetary Industry operations.

Also, factional warfare will receive another income source as building tech 2 ships like the Deluge and Torrent requires invention.

Upon the launch of Equinox on 11 June, blueprints for the Squall and Avalanche will be accessible at all Upwell Consortium member NPC stations. The Deluge and Torrent must be invented from Squall blueprint copies. The invention jobs require new Upwell starship engineering datacores, which are available in the four empire Factional Warfare militia LP stores. Additionally, the construction of these new Tech II ships calls for new Upwell components, with blueprints available from all Upwell Consortium member NPC stations, using a mix of all the racial components.

I'm interested in how much activity throughout New Eden will change as players scramble to figure out how to profit off the changes coming to EVE Online on 11 June in the Equinox expansion. Honestly, I expect the null sec alliances, both big and small, to spend the third quarter converting to the new game systems. With any luck we'll see plenty of Upwell haulers reach the markets as well.

Down The Rabbit Hole Of Pearl Abyss Iceland's 2023 Consolidated Financial Statements

Last week I published a blog post covering CCP ehf.'s (aka CCP Games) financial statement for 2023. I just glossed over the statement for Pearl Abyss Iceland and it's $18.8 million loss for 2023. I did so because of two paragraphs, one in each financial statement. In CCP ehf.'s board of directors statement:

The Company's revenues in 2023 were USD 73.2 million compared to USD 68.6 million in the previous year. The net profit for the year amounted to USD 5.6 million compared to a net loss of USD 205 thousand in the previous year. New service revenue related to outsourced development work, along with general cost savings, are the main reasons for the change in net results between years. [emphasis mine]

Pearl Abyss Iceland ehf. is the holding company that owns CCP ehf. In greater detail:

Pearl Abyss Iceland ehf. is a holding company established in 2018. In October 2018 the Company bought all issued and outstanding shares in CCP ehf. CCP ehf. designs, develops, markets and operates immersive virtual worlds and games accessed over the internet. The Company is headquartered in Iceland and owns and operates subsidiaries in the United Kingdom, China, and the United States.

I'm not an accountant, but I would think the revenues of the holding company should either equal or exceed the revenues of each of the owned companies. Yet, here is the same paragraph from the Pearl Abyss Iceland filing.

The Group's revenues in 2023 were USD 56.0 millions compaired to USD 56.1 million in the previous year. The net loss for the year amounted to USD 18.8 millions compaired to a net loss of USD 70.1 million in the previous year. The main reason for the loss is inceased investment in projects under development as the Group expenses all development projects. [emphasis mine]

One of the perks of owning your own blog is the freedom to set your own deadlines and pick your own stories. So I decided to go down the rabbit hole of Pearl Abyss Iceland's 2023 Consolidated Financial Statements.

First, I looked at the top of each statement covering gross profit.

Where did the money go?

I found the missing $17 million dollars. CCP's "Other revenue" wasn't counted by Pearl Abyss Iceland. In fact, the total is $30 million over the last two years. So the question became, where did the money come from?

Going to note 4, the amount seems related to providing services. I would wager a lot of people did not expect that category to show up.

CCP's sources of revenue, 2023

The answer came from companies related to Pearl Abyss Iceland. Specifically Angelice Prime Foundation.

The companies owned or controlled by Pearl Abyss Iceland

PAI does not have an ownership stake in the company, but controls enough of its business that both PAI and CCP had to disclose the fact on their financial statements. How much business? According to CCP's financial statement, the company purchased $17,246,907 worth of goods and services in 2023 from CCP and a combined $29.8 million over 2022-2023.

The next question is, what is Angelice Prime Foundation? I could find very little information, but I have a feeling ex-CCP employees are involved. According to PAI's financial filings, Angelice Prime Foundation and its subsidiaries are involved in software development. Concord SSC is a direct reference to EVE, but Angelice Prime? 

Angelice Prime apparently was a system in the Phoenix constellation of Fountain. I use the past term because the system did not survive to see the launch of EVE Online. The only trace left I could find was the below video.

EVE Online's first trailer made with actual gameplay

So the search leads back to the beta (or perhaps even the alpha) and the first game trailer featuring exploding spaceships back in 2002. But as far as I can tell, CCP did not begin doing enough business with Angelice Prime Foundation to need to declare the company in its financial statements until 2022.

Speaking of outside companies, we next come to NetEase. NetEase not only operates the EVE Online server shards operating in the People's Republic of China but developed and publishes EVE: Echoes worldwide as well. 

Highlighting NetEase revenue

The deals with NetEase brought in 12.5% of Pear Abyss Iceland's revenue in 2023. But year-over-year the income fell 20.1%, from $8,792,803 in 2022 down to $7,021,654 in 2023. 

I think the NetEase revenue falling 20.1% yet total revenue only declining by $135,000 is significant when evaluating the performance of EVE Online. For 2023, the line "Revenue from subscriptions and in-game sales" represents the financial performance of EVE on the global Tranquility server. Revenue in that category grew 3.2%. The global version of EVE performed a little better than that as in 2022 the category contained revenue from the virtual reality games CCP shut down in 2022.

Next comes the issue of debt. Specifically of borrowing money. For this subject I will include CCP as well as Pearl Abyss Iceland. In November 2021, CCP's $6.5 million loan from Pearl Abyss was extended by three years. In February 2023 the repayment scheduled was accelerated, with CCP paying its parent company $3.8 million in 2023 and will finish repaying the final $1.95 million in August of this year.

Pearl Abyss Iceland, at the same time, paid off its original loan from Korea Development Bank a year early.

In October 2023, the Group financed USD 50,000,000 from Pearl Abyss Corp. to repay the existing borrowings from banks and other financial institutions in a single loan agreement arranged by The Korea Development Bank. The interest period is 12 months and the interest rate is fixed at 4.6%. 

The loan was originally due in October 2024. By paying off the loan and then taking out a new loan at new terms, they possibly received a better interest rate. At any rate, the next time Pearl Abyss Iceland needs to pay off a loan is in October 2026.

Perhaps out of order, but deferred revenue increased in 2023. Deferred subscription revenue from outstanding subscription time rose by 10.4%. Unused in-game purchases (i.e. items like PLEX) rose by 41.5% in value. Given that in 2021 those values were $2,950,492 and $4,075,423 respectively and one could theorize interest in EVE Online increased in 2023.

Deferred revenue includes money for the Project Awakening crypto-currency

The final topic concerns the planned Web3 game currently code named Project Awakening. In 2023, PAI collected $27.5 million in sales from token warrants, aka crypto currency. Added to 2022's total of $10 million and the Group currently owns $37.5 million in token that sits as deferred revenue. When the $40 million round of venture capital investment is included, outside funding of Project Awakening finished 2023 at $77.5 million.

Pearl Abyss Iceland is working to make a Web3 game based on the EVE intellectual property a reality. While the effort began in 2022, I don't believe the rules under which PAI and CCP is operating are fairly understood. For my own benefit if for no other reason I will copy the relevant portions of the consolidated report below.

3.18 Accounting policy for crypto assets

The Group is developing a blockchain-based network and planning to issue crypto tokens on the network upon completion of the development. The token to be issued on the blockchain network by the Group is a utility token.

I believe this is a definition to give anyone who knows anything about crypto-games, combined with a little accounting.

3.18.1 Sales of token warrant

The Group has sold warrants to purchase utility tokens. Because the Group has the promise to transfer goods and services in the future, the Group intends to recognize revenue when the tokens have been delivered and used.

The warrants cannot be settled net in cash or another financial instrument, or by exchanging financial instruments, and the warrants are purchased and held for the purpose of the receipt or delivery of the token. Because the Group didn't designate the warrants as measured at fair value through profit or less, IFRS 9, Financial Instruments, is not applied to the warrants. The contract liabilities for the sales of token warrants are recognized as the fair value of the consideration received at initial recognition and not evaluated at fair value subsequently.

Basically, this part explains why the token warrants are listed under deferred income.

3.18.2 Employee token incentive plan

The Group granted options to purchase the tokens to the current employees in service as of the grant date. The options shall vest when the employee renders service for the vesting period. When employees exercise the option and pay the exercise price, employees are given tokens, on the other hand, employees in the Chinese office are given a cash bonus equivalent to the fair value of the token at the time of exercise.

The fair value of the cash bonus in the Chinese office is recognized as salaries and other long-term employee benefits liabilities over the vesting period. The measurement of the token option plan, a non-monetary benefit, is not described under IAS 19, Employee Benefits, hence the Group derived the accounting policies using the guidance in IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors.

An expense is described as decreases in assets, or increases in liabilities, that result in decreases in equity, other than those relating to distributions to holders of equity claims. The Group develops an accounting policy that measures the net marginal cost related to employee token options as salaries and other long-term employee benefits liabilities and recognizes the expense over the vesting period of the option.

I've heard of employee stock option plans, but never heard of an employee crypto-currency plan. I guess the dream is to duplicate the tech boom of the 1990s for employees with the next big thing. I just had two thoughts. First, won't PAI and CCP have to show how many employees participated for how much in crypto in future releases? And the second one is more obvious. Will PAI allow employees to play Project Awakening when the game goes live?

3.18.3 Other crypto assets

The Group holds other crypto assets (such as Ethereum and etc.) for various business purposes. The Group does not hold other crypto assets for sale in the normal course of business but holds them for various business purposes. Because the crypto assets held by the Group are identifiable non-monetary assets that have no physical substance and are controlled by the Group, the crypto assets are recognized as other intangible assets in accordance with IAS 38. A cost model is applied after initial recognition and impairment tests are conducted at the end of each reporting period using fair value less costs of disposal.

And finally the rules for all other non-Project Awakening crypto currencies.

My final thought on the report is I feel a lot better about Pearl Abyss Iceland's finances and the future of EVE Online than I did in May 2022. I see evidence of the two expansions a year development model paying dividends. Small dividends perhaps, but still trending in a positive direction. And the efforts to become a leader in Web3/blockchain gaming apparently isn't syphoning money away from EVE. In addition to $40 million in outside investment money raised to develop Project Awakening, PAI and CCP have sold through the end of 2023 $37.5 million in warrant tokens to fund the new currency. Plus, CCP ehf will have paid off its last loan in August 2024 and PAI's next financial deadline is in October 2026. Overall, I liked what I read.

Pearl Abyss Q1 2024 Earnings Call

On Thursday in South Korea, Pearl Abyss held its earnings call for the first quarter of 2024. The big news was the performance of the Black Desert intellectual property, with a revenue increase of 11.1% to ₩66.8 billion ($50.2 million). But overall, the company's operating revenue only increased by ₩1 billion to ₩85.4 billion ($64.2 million), a 1.2% quarter-over-quarter increase. Compared to the first quarter of 2023, the company recorded a 0.5% decrease in revenue.

From the presentation

Pearl Abyss returned to profitability in the first quarter, recording a net profit of ₩12.8 billion ($9.6 million) and an operating profit of ₩600 million ($500,000). Year over year, net profits were up 36.2% while the operating profit declined 45%. The percentage made the operating profit decline sound scarier, as the decline in won was only ₩500 million ($400,000).

From the presentation

To tell the story of the Black Desert IP, we need to look at the EVE IP revenue first. As pointed out by Pearl Abyss Chief Financial Officer Joh Seokwoo, the EVE IP suffered a quarter-over-quarter revenue decline of 9.5%, down to ₩18 billion ($13.5 million).  Puzzlingly, he did not point out the year-over-year increase of 6.5%, a total increase of ₩1.1 billion ($200,000). The switch of CCP Games' strategy of releasing two expansions per year may establish a pattern of revenue peaks in the second and fourth quarters of every year, falling back in the first and third quarters. If so, then looking at revenue year-over-year may have more relevance than the quarter-over-quarter numbers.

Now to the improved performance of the Black Desert IP. Quarter-over-quarter, Black Desert revenue increased ₩6.7 billion ($4.7 million) up to ₩66.8 billion ($50.2 million). Year-over-year, Black Desert revenue declined slightly, down ₩700 million or 1%.

What raises eyebrows is the platform data. Converting the percentages to currency totals, mobile revenue increase from ₩9.6 billion ($12.7 million) in Q4 2023 to ₩22 billion ($29.3 million) in the first quarter of 2024. Most, if not all, of the increase is attributable to Black Desert Mobile.

Looking at PC revenue, performing the percentage to actual conversion results in a quarter-over-quarter revenue decline of 11.9%, from ₩66.4 billion ($87.7 million) down to ₩58.5 billion ($77.8 million). Assuming all of the EVE IP revenue decline occurred on PC platforms, then Black Desert Online on PC saw a decline of ₩6 billion ($4.5 million). The question is why? Is the answer similar to the EVE IP's? That is, no new content while the mobile version received more due to new content pushed to mobile after the PC and console versions received the updates? 

Upcoming highlights according to Pearl Abyss

Perhaps one of the most important points came from what the investment analysts on the call did not ask. No questions about Project Awakening, despite the presentation trying to highlight the Web3 project on the call. Is this an indication that this type of project is no longer the flavor-of-the-month?

The analysts seemed interested in two subjects. The first is the progress of introducing the PC version of Black Desert Online into the People's Republic of China. The latest progress report is that all paperwork was turned into the authorities and the waiting begins for approval.

Stepping outside the presentation, Pearl Abyss' optimism in not misplaced. In January, the Chinese government approved 115 new video game titles, the largest amount in 18 months. Pearl Abyss' partner in the People's Republic, Snail Games China, is not the biggest player in the Chinese market but has not incurred the wrath of the regime either. 

The other topic of interest was the development of Crimson Desert. Marketing efforts will begin as the game finishes development. Expect a big marketing effort to begin at GamesCom in August. Not only will the company reveal a new gameplay video but also provide demos for attendees to play as well.

The analysts were also informed that the marketing plans include an appearance at G-Star, a major video game event held in South Korea in mid-November. If the marketing team is including G-Star in their plans, Crimson Desert will probably not launch before December 2024. Given Pearl Abyss is a South Korean company, I suspect the announcement of Crimson Desert's launch date occur then.

One question an analyst asked was whether Crimson Desert would launch as a console exclusive, like Final Fantasy XVI launched as a Sony Playstation exclusive last year. The representatives from Pearl Abyss neatly sidestepped the question, but I received the impression the answer was no. Then again, that was just an impression.

I should add one last item of interest. While the analysts did not ask about ongoing projects currently in public testing like EVE: Vanguard or EVE: Galaxy Conquest, questions were asked about DokeV. The project was mentioned unprompted in the main portion of the call, but during the Q&A portion of the call Pearl Abyss reiterated development of the game will not really ramp up until Crimson Desert is released.

A note about currency conversions.

All currency conversions in this blog post were performed using the rates displayed on the Federal Reserve Bank of St. Louis website using the average quarterly exchange rate. As a check on the accuracy of the methodology, I compared the revenue amounts listed on the quarterly investment calls of 2023 with the actual figure from the tax filings released by the Icelandic taxing authority this week. For 2023 I came up with revenues of $55,865,000 and the actual game revenue reported to the Icelandic government was $55,735,000. The difference was 0.2% more, in case the accuracy of the methodology is a concern.

A Look At April 2024's Active ISK Delta

CCP Games published EVE Online's monthly economic report (MER) for April 2024 yesterday. While all the financial information about video gaming is looking back at the first quarter, followers of the EVE economy are already examining second quarter data.

From the April 2024 Monthly Economic Report

The two biggest money sinks in EVE Online in April were death and taxes, not necessarily in that order. The biggest individual ISK sink were transaction taxes, mostly if not entirely from sales on the market. I'm still a little fuzzy on the concept as defined in the data. If broker fees are added to the 35.7 trillion ISK collected in transition taxes, the process of buying and selling things in New Eden added up to 47 trillion ISK.

The death part of the equation is the 24.5 trillion ISK removed from the money supply as measured by the Active ISK Delta.  The metric, as defined by CCP, is the net effect of ISK coming and going with player accounts, including all GM actions. If the number is positive, players are returning to the game. If the numbers are negative, then players are leaving the game with more money than those returning to the game. The number also counts the ISK that left the game from those who did not log in for the past 30 days.

A historical view of the Active ISK Delta

If history repeats itself, we may see a positive Active ISK Delta and players return to the game for the anniversary celebration held on 6 May. The economy did see a 16% month-over-month reduction in ISK leaving the economy due to players winning and losing EVE. Year-over-year, however, the Active ISK Delta experienced a 59.1% increase in the ISK sink the metric measures.

The number of average concurrent users from 1 May 23 to 30 April 24

Overall, the Active ISK Delta still seems to track with the number of players logging into the game. The 30-day average slid upward a bit and so did the value of the Active ISK Delta, from -29.2 trillion ISK up to -24.5 trillion ISK. But perhaps the biggest news is the money supply in New Eden growing 1.4% in April. If the money sinks don't perform up to the developers expectations, players may see another effort to reign in ISK faucets.

EVE: Equinox And CCP's Plans For Null Sec

Yesterday CCP continued the Equinox hype train with a video and news article on the upcoming changes coming in EVE Online's summer expansion. Waking up to a new video was a pleasant surprise.

The developers went into greater detail about some of the planned changes. The one that snapped me wide awake is the substitution of customs offices in null security space with orbital skyhooks. My first thought was, "A lot of players are going to find out how Interbus felt when the customs offices were introduced." 

The changes will introduce three new structures to the game. The first, the aforementioned orbital skyhook, is required to obtain the resources needed to make the entire Equinox system work. In addition to existing planetary interaction resources, player groups will need skyhooks to obtain the new colony resources coming this June. But, importantly, only in player-owned null sec. The orbital skyhooks are not usable anywhere else.

Remember back during 2019's Chaos Era when CCP set the Drifters to attack the structures of the null sec powers? The developers did not abandon the idea. Orbital skyhooks will also attract NPC pirates.

Once an orbital skyhook is in place, capsuleers must be vigilant, as there's a periodic risk of encountering a Pirate Orbital Blockade. These blockades challenge players to either engage in combat with pirate NPCs, potentially at an officer level, including capital and supercapital ships, or run the blockade. Successfully lifting these blockades rewards pilots with ISK in addition to enhancing the defensive rating of the solar system. The blockades thus give capsuleers more opportunities to tackle powerful pirate NPCs for impressive rewards. 

I'm not sure how the PvP focused players in null sec will handle having to defend their space from NPCs. Hopefully the pirate AI has improved over the past 5 years.

The next structure is something I've wanted to see for a long time. CCP is finally replacing the territorial control unit and infrastructure hub to create the sovereignty hub. As someone who tried following null sec wars, the territorial control unit never made sense. Combining the two into one structure makes a lot more sense. I think though, the move gave the developers an opportunity (or excuse) to revamp the old I-Hub upgrades. The following examples sound a lot more powerful and tempting than the existing upgrades.

One example of improved sovereignty upgrades is the addition of a new, harder combat anomaly for the Pirate Detection Array upgrade. Furthermore, all sites detected by this array will now have a chance to escalate, with some having the possibility of capital or even officer escalations. 

Another upgrade will allow the detection of previously undiscovered ores, allowing sovereign nullsec leaders to choose what minerals their system will provide, potentially reducing manufacturing bottlenecks and shaping space to suit their needs. 

Once again, we are seeing efforts from CCP to add new PvE content to null sec. We will need to see what the effects on the economy are over the rest of the year.

The final structure breaks the pattern of null sec only content as players can deploy the new Metenox moon drill in any place moon mining is possible. CCP's vision for the structure follows:

The Metenox may be less efficient than manual extraction by players using an Athanor or Tatara, but instead, it slowly collects the resources obtained from mining and refining moon ore in an automated fashion. This gives smaller alliances and corporations normally more focused on aggression the ability to mine moons, even if they lack the necessary manpower. For those groups that do have the manpower, they can focus their attention on the high-value moons while the Metenox takes care of the lower value ones.

The Metenox moon drill is a throwback to the pre-Upwell passive moon mining POS. In those days, moon mining was a cause for fights as often the ISK generated from the moon did not pay for the defense of the moon, especially in low sec. But this latest iteration has a twist: running the Metenox requires reagents, one of the new null sec only resources harvestable with the presence of an orbital skyhook. The availability of reagents will deterine the use of the Metenox moon drill outside null sec.

Speaking of regeants, now is a good time to discuss the new colony resources found only in null security space: power, workforce and reagents. Once again I'll let the developers explain.

Power comes from suns or plasma and storm planets. It is a hard limitation within each system, which determines how many upgrades your sovereignty hub can support and run. Workforce consists of the people, specialists, and tools required to run these upgrades. This is a soft limitation and can be transferred between systems, however certain conditions apply. Reagents are two new fuel types, extracted from ice and lava planets. They are used to fuel sovereignty upgrades and to run the Metenox moon drill, and are freely exchangeable, opening new market opportunities for entrepreneurial capsuleers. 

Once the resources have been extracted, power and workforce will become available in the sovereignty hub, while reagents must be collected and distributed. 

The change to make planets and not just base security status important may have knock on effects. The devs may think they know, but until the leadership of the various major and minor null sec powers examine the space geography, I wouldn't think to guess what the forms of those changes will take. CCP, on the other hand, decided to publicize the goals of the new colony resource system.

Perceptive pilots will notice that power is somewhat of a baseline resource, while the other two offer more opportunities for disruption. As power and workforce will be required for sovereignty upgrades, fresh opportunities will emerge for those looking to sabotage and disrupt by choosing to destroy orbital skyhooks. These structures function similarly to medium Upwell structures with a single shield reinforcement and damage caps on armor and hull, and will continue working while reinforced. 

Additionally, a new form of hit-and-run activity is being added around the orbital skyhooks, allowing pilots to hack into them in the style of ESS heists, enabling them to steal resources and sell them off. Reagents will have a period of maturation within the structure, ensuring that they will always be somewhat vulnerable to theft. 

Throwing enemies’ workforce into disarray by attacking a sovereignty hub’s Workforce Transport Complex or a workforce-providing skyhook directly or even starving them of an essential reagent before an attack will become viable stratagems, bringing meaningful new conflict drivers to the table for raiders and attackers. 

The introduction of these new structures is sure to gain immense attention, including the notice of local pirate forces, so be wary of warping to these structures in undefended haulers! In fact, there’s a chance of facing officer-level NPCs around skyhooks, so be prepared. 

Honestly I'm not sure New Eden will ever see the major reason for large-scale wars in null sec turning on economic issues. I believe interpersonal conflict will still lead to in-game war. But the people who get paid to think and implement ideas think differently. Of course, previous generations of EVE Online developers learned development plans never survive contact with the player base.

One plan the developers have does get my full approval. Bitter vets may find the idea hard to believe, but the Equinox suite of products and systems was designed with the user experience in mind. Perhaps I should credit the existence of the Upwell Consortium and the need to fit into the Upwell look and feel.

First, the user experience team developed an in-space UI to make depositing of fuel easier, as well as listing hacking objectives. The UI also contains important information concerning the Equinox suite. Did CCP actually design a feature to make the lives of alliance logistics players easier? I hope the answer truly is yes.

Next, the Agency is receiving another addition.

Information about the distribution of the new colony resources, power, workforce, and reagents will be easily accessible through the Agency window under the Resource Harvesting tab. The interface allows capsuleers to search and filter for specific resources, their availability and quantity, informing pilots’ decisions about the expansion of their sovereign space and empowering them to find and target valuable star systems. 

On a non-Equinox note, I remember when the Agency was first introduced and seemed a downgrade from what we had. Over the years, though, the developers continued iterating on the feature, which years ago was something CCP was not known for.

But perhaps a bigger deal is supporting the leadership of player organizations with in-game tools.

Capsuleers in managerial roles will gain access to a dedicated interface capable of installing and prioritizing upgrades. Pilots will be able to design their desired layouts for upgrades, monitor resources available to the sovereignty hub, and efficiently manage workforce transfers. The interface provides a centralized hub for strategic decision-making, enabling managers to optimize their territory effectively. 

I also want to applaud the developers of thinking about the spies. I realize the devs probably weren't concerned with operational security with this decision, but that's what came to mind when I read the following paragraph.

Additionally, through the corporation window, all players within an alliance holding sovereign nullsec territory can now track collective progress, receive updates, and gain insights into their sovereign space activities. The alliance tab has been revamped with a new section dedicated to sovereignty. The aim here is to strike a balance between clarity, accessibility, and engaging aesthetics. By incorporating table layouts for easy sorting, filters for enhanced research, and graphical data representation for items such as resource allocation and fuel consumption, the interface is designed to inform and captivate, ensuring capsuleers stay engaged and up to date about the state of their territory. 

Honestly, I can't wait to hear how the null sec alliances deal with the security implications.

I'll finish this post off with how CCP believes players will utilize the new Equinox sovereignty system.

With the introduction of the Equinox suite, Upwell sets out to redefine the strategic importance of system locations within the universe. It enables capsuleers to specialize the systems they oversee, providing the flexibility to adapt and maneuver workforce resources across their territories as necessary. 

Strategic planning is paramount with the Equinox suite, as pilots must consider potential attack vectors. For instance, a system might offer substantial power resources but lack nearby workforce sources and be susceptible to isolation. Capsuleers may invest in such a system or opt for a less optimal but more defensible position. Furthermore, pilots must consider how they'll distribute various system upgrades to maximize their effectiveness - specializing in mining or combat operations could greatly influence their strategic decisions. 

The Equinox expansion also introduces heightened opportunities for raiding, trading, and betrayal. Expect intense specialization in mining or combat readiness in certain systems. Pilots can utilize Metenox moon drills as strategic bait for skirmishes or as significant income sources on a larger scale. The ability to fine-tune systems to suit specific needs, such as mining for isogen or hunting high-level pirates, will appeal to many. For those adept at wormhole operations, the thrill of ambushing an overly ambitious adversary or raiding a vulnerable reagent skyhook offers a tantalizing prospect. 

As I mentioned before, CCP's development plans never match up with what players ultimately do in EVE. But the new system does address some of the weaknesses of the current system, such as useless sovereignty structures and reintroducing conflict drivers. I have the feeling Equinox will received some positive player feedback this summer. Then again, I don't play in null sec, so I might be wrong.

CCP Games Revenue Up 6.7%, Returns To Profitability In 2023

Today the financial statement CCP ehf. (aka CCP Games) filed with the Icelandic taxing authority for covering 2023 became available on the Skatturinn website. Last year the game company's revenue increased 6.7% to $73.2 million, compared to 2022's $68.6 million. The $5.6 million profit recorded was the first since 2020. The company attributed the revenue gain to "new service revenue related to outsourced development work, along with general cost savings." Indeed, the filing showed a decline of $180 thousand in game revenue compared to 2022's $55,914,671. 

One point to mention is apparently CCP did not reduce overall headcount in order to come up with savings. The company began 2023 with 177 employees and ended the year with 173.

Pearl Abyss Iceland, the holding company controlling CCP ehf, recorded a loss in 2023 of $18.8 million. In 2022 the figure was $70.1 million.

A year ago for the 20th anniversary of EVE Online I created a post looking back at what previous financial filings said about each year of CCP's existence since the launch of EVE. I figured I'd continue the practice by posting the company's submitted review of 2023.

CCP ehf. designs, develops, markets, and operates immersive virtual worlds and games accessible over the Internet. Its mission is to create virtual worlds that are more meaningful than real life. The Company is headquartered in Iceland and owns and operates subsidiaries in the United Kingdom, China, and the United States.

Operations during the year

The Company's revenues in 2023 were USD 73.2 million compared to USD 68.6 million in the previous year. The net profit for the year amounted to USD 5.6 million compared to a net loss of USD 205 thousand in the previous year. New service revenue related to outsourced development work, along with general cost savings, are the main reasons for the change in net results between years. Assets at year-end were USD 71.0 million, shareholders' equity USD 29.8 million and equity ratio 41.9%. The Company employed 173 people at year-end compared to 177 at the beginning of the year. 

In June 2023, CCP released Viridian, a major expansion for EVE Online that introduced sophisticated new tools for players to manage their corporations and set goals. These tools created new avenues for players to forge relationships and engage in socially driven gameplay. The expansion also included new cutting-edge visual updates.

Also in June, CCP deployed the free Microsoft Excel add-in for EVE Online, developed in collaboration with the Excel team at Microsoft. The first integration of its kind for a video game, the add-in revolutionizes EVE Online gameplay by enabling EVE players to gain deep insights into their in-game activities, track their progress, and strategize their next steps using Excel’s robust analysis and visualization tools.

In July, CCP announced the renewal of its publishing license with NetEase Games, a leading international developer and publisher. This agreement reaffirms NetEase Games' role as the exclusive publishing partner for EVE Online in China, ensuring a seamless gaming experience for Chinese players.

During EVE Fanfest 2023, held in September 2023, CCP announced its next expansion for EVE Online, named Havoc. The expansion was released in November 2023 and introduced new gameplay mechanics, ships, and customization options. CCP also revealed the Carbon Engine, a robust technical and graphical improvement for EVE Online.

At EVE Fanfest CCP presented a first look at EVE Vanguard, an upcoming multiplayer FPS module for EVE Online. EVE Vanguard is designed to be connected to EVE Online from day one, allowing players to impact EVE Online through their gameplay in EVE Vanguard. Over time, new gameplay, content and interoperability with EVE Online will be added, deepening the immersion for players and the living universe of New Eden.  In December, EVE Vanguard was made accessible to all EVE players with an active Omega account with the start of a series of four-day-long public playtests, dubbed ‘First Strike’, which recur on a monthly cadence.

CCP also revealed EVE Galaxy Conquest, a 4X strategy mobile game, during EVE Fanfest. Developed by CCP's Shanghai studio, EVE Galaxy Conquest immerses mobile players in New Eden’s thrilling cosmos, combining exploration, diplomacy, and epic player-vs-player battles. Maintaining EVE’s trademark characteristics, players will have the option to combine their strengths and form Corporations to tackle greater challenges. EVE Galaxy Conquest soft-launched in select regions on iOS and Android devices in Q4 2023, with a global release planned for 2024.

In March 2024, CCP revealed the first details about Project Awakening. With a 26-year studio history, Project Awakening represents the next step in CCP’s journey to create virtual worlds more meaningful than real life. Designed with player empowerment at its heart, Project Awakening is being developed as a single-shard survival experience that unlocks boundless creativity for third-party development via blockchain technology and cryptography.

The Board of Directors does not propose dividend payments to shareholders in 2024. Concerning the allocation of profits and changes in the equity of the Company, the Board refers to the Notes attached to the Financial Statements.

At the beginning of the year and year-end 2023, Pearl Abyss Iceland ehf. is the only shareholder in the Company.

April 2024 Activity In EVE Online

The 21st anniversary of the launch of EVE Online is just a few days away. While the game is still far from its peak in 2013, the game is still doing better than at its lowest points in the Alpha and Omega era in 2019 and 2022. The statistics in April weren't exciting, but showed the game still rising above its low points.

Jester's Average Concurrent User Graph

The 30-day average shows a very slight increase in the amount of accounts logged in at any one time in April. The 7-day average showed a dip in the middle of the month with a rise around the time of the Equinox expansion announcement. The logged in activity is most important to show New Eden still has approximately 20% more accounts logged in than in April 2023.

Statistics from Dotlan Maps

The next piece of information is measuring if the increased number of logged in accounts equates to more shooting of internet spaceships. Compared to April 2023, the answer is yes. I'll get to low sec a little later because the high sec and null sec activity is significant. The number of high sec player ships killed equates to many things, including insurance fraud. But the numbers also include new players as some of the tutorial and career agent missions require new players to lose a ship. The 29.0% increase does indicate something is happening.

Null security space also shows increased activity. The number of player ships killed isn't as significant as the 43.5% year-over-year increase in the number of NPCs players are killing in their quest to play for their PvP activity or even their game time. Null sec wars do gain EVE publicity, but as we learned during the Chaos Era, null sec PvE pays the bills.

I do want to add that I am aware of the massive (for wormhole space) going on between Singularity Syndicate and Lazerhawks over class 6 wormholes. But with CCP shutting down access to wormhole statistics years ago, looking at that activity requires either accessing the zKillboard API or the files from the April monthly economic report.

Going back to low security space, we see that for the seventh consecutive month the number of player owned ships blown up in the security band exceeded 200 thousand. Also for the third month out of the past six the number exceeded 250 thousand. I will note, however, that the number was perhaps inflated by Snuffed Out when they managed to destroy a structure with thousands of shuttles owned by Rixx Javix. I do not know if CCP removes such kills. I guess we'll find out when the next MER is published in the next few days. But with one more month until Equinox launches with major null sec changes, low sec still seems in better shape than before the Uprising expansion in 2022.

We still have one month to go, but right now the Havoc expansion looks to go down as one of the most successful content drops since the Ascension expansion of November 2016 introduced the free-to-play Alpha account to EVE Online. I might be experiencing recency bias, but after Havoc I think the game is in a much better place.

Cloud Imperium Games Sales Revenue Down 24.7% In April 2024

April continued a horrible sales year so far for Cloud Imperial Games. After suffering a 17.2% year-over-year sales decline in the first quarter of 2024, the CCU Game dashboard showed April sales at only $5.2 million. The 24.7% drop in revenue compared to April 2023 pushed the year-over-year decline down to 19.1% for the first four months of 2024. For the year, CIG's revenue from the cash shop recorded on the Roberts Space Industries funding page is $22.5 million.

Does the number of new users on the Roberts Space Industries website have any relationship to sales figures? April demonstrated the answer is no. Last month's increase of 25,000 users was a 73.6% decrease from the 94,703 new users recorded in April 2023. Either new players spend a lot more money than in 2023 or CIG mostly gets its revenues from veteran players.

Overall, the recorded sales tracked on the CCU Game dashboard is $679.9 million since the launch of the Kickstarter in October 2012. But Cloud Imperium has additional funding sources not tracked by the dashboard. Overall, the company has recorded $778.5 million in confirmed revenue (the funding page & the 2022 financial report) .

• Sales/Pledges: $679.9 million (through 30 April 2024)
• Subscriptions: $33.0 million (through 31 December 2022)
• All other sources: $65.6 million (through 31 December 2022)

In addition, the company has received a total of $63.25 million in outside investment. According to the 2022 financial report, $4.8 million of the amount was returned to investors in 2020. Including the outside investment money, the total amount raised by CIG to create Squadron 42 and Star Citizen is $837.0 million.

May will prove a key financial month for Cloud Imperium Games. The Invictus Launch Week, otherwise known as Fleet Week, is traditionally held in the final week of May. The event usually generates the second most revenue, after the Interstellar Aerospace Expo in November. 

While an announcement for pre-orders for Squadron 42 is expected in October at Citizen Con, a poor showing this month may force CIG to begin taking pre-orders in 2024. The company is facing the prospect of the Calders exercising a put option for their 1,599,900 shares of Cloud Imperium stock in the first quarter of 2025. Ideally the company does well enough in 2024 to convince the father and son duo to hold off on exercising the option until 2028.

What To Do With My Island Sanctuary After A Year

Over the weekend I completed another grind in Final Fantasy XIV. As grinds go, obtaining the Island Adenium mount from my island sanctuary wasn't onerous. I just needed to go to my island every Tuesday and ensure I would earn the maximum number of Felicitous Favors (7) from my workshops every week for 29 weeks. Honestly, apart from the necessity of stocking up on some inputs once a month, spending 10-15 minutes on my island each week wasn't a big deal. Especially since I am still hooked on the feature.

Island sanctuaries first came out in April 2023 with patch 6.2 and this weekend I thought I had just about finished the content, with the minor exception of not earning the Sustainable Sourcing III title. I decided to write a celebration post but while doing the research, I ran into a problem. I had more to do.

The big one is one more mount, the Island Perrifool, exists. The whistle to summon the mount is found in Sanctuary Materiel Containers which costs 10 Felicitious Tokens. Considering the maximum number of tokens one can earn per week is 7, that comes out to two or three chances to get the mount per month.

Then I looked up the loot table for the Material Containers. The chances of getting the mount within 3-4 months is probably slim. Some of the consolation prizes are not bad, however. For example, I see many minions available.

• Bombfish
• Bom Boko
• Castaway Chocobo Chick
• Dwarf Rabbit
• Ghido
• Hunting Hawk
• Korpokkur Kid
• Odder Otter
• Road Sparrow
• Shaggy Shoat
• Tiny Tatsunoko

Some are very common and some are rare enough I still don't have one. But continuing looking I found something more interesting. I've mentioned in the past how the island sanctuary is a good way to get some of the more rare dyes passively. But all of the dyes available from the cash shop are in the loot table for the Sanctuary Materiel Containers. I should add that the cash shop dyes are sellable on the market board, making the dye trade one of the legal ways to convert real life cash to gil.

I should add for crafters some of the materials to make special glamour items are also available from the containers. These include:

• Fireglass Leather
• Indego Cloth
• Seacloth
• Waterproof Cloth

Speaking of crafting, I still need to acquire three more landmarks. The Water Otter Fountain, Uncharted Course, and Aetherial Arbor all require expert crafted items to obtain. As just so happens, I finished acquiring my last Lodestar crafting tools two weekends ago. I really should use the tools to finish obtaining access to all the landmarks for my island.

And, of course, I still have not decorated my island beyond advancing the levels of my buildings. I tend to get caught up in the upgrades and fall behind in the game. For example, I still am in the patch 6.4 content of the MSQ after spending time to fix up my new cottage.

Honestly, I can't get everything done in the two months until Dawntrail launches. But if the next Island Sanctuary type feature doesn't come out until patch 7.2, I probably have the rest of the calendar year to finish up my island.

Another EVE: Equinox Advertisement From The Upwell Consortium

I think both myself and Wilhelm from The Ancient Gaming Noob are having a little fun with the Upwell Consortium's attempts to sell players on the Equinox expansion coming out on 11 June. First, they came out with a marketing brochure trying to sell the cluster on their system. The accompanying promotional video is so good I'm posting the video for the second time this week.

To make the point, I'm even including a transcription of the video.

To shape destiny is within all of us. With Upwell you can shape the universe. Unlocking the potential of the stars and planets you call home has been the unwavering focus of our finest minds. And now, we stand on the cusp of a new era. 

Introducing Equinox. An unrivalled suite of solutions for a new age of colonization. Revolutionary structures that offer unprecedented systemwide control. All operated and maintained by an efficient and skilled workforce. 

Embrace the freedom to shape space in your image and seize the dream of a star system entirely under your command. 

Equinox.

Today, the Upwell Consortium came out with a new commercial plastered across Galnet (aka YouTube). The marketing department over at Upwell is doing such a fine job I decided to post and transcribe their latest effort.

Man in wheelchair: I always dreamt that one day I'd make it. Do something great. See the stars. But sometimes reality has different ideas. I remember those dreams starting to slip away. Those doors, they never opened for me. 

Narrator: Until now. Because with Upwell, it's never too late. 

We will give you a new life. A way to make a difference. Our cloning technology will provide you with a second chance. A fresh start. 

Be the version of yourself you were destined to be and seize the dream of a future that you've chosen. 

Upwell.

Does anyone trust Upwell not to create an army of clone slaves? I just want to remind everyone what CCP Burger was quoted as saying in CCP's press release announcing the expansion.

“EVE has always been defined by its players’ ability to forge their own destiny through economic dominance, political machinations and military conquest,” said Bergur Finnbogason, EVE Online’s Creative Director. “With Equinox, we’re taking that open-ended freedom to new heights by giving pilots greater agency over nullsec’s valuable resources - while challenging them with the moral implications about the cost of such ambition. We’re also extremely excited to see what amazing designs players will make with EVE’s new SKINR tool: the sky truly is the limit for personalizing your favorite ships.”

I like the part about the "while challenging them with the moral implications about the cost of such ambition." Given that the lore basically sets up "capsuleers" or "Empyreans" (i.e. players) as demi-gods, the moral implications might go ignored.

Given that the Upwell Consortium was formed over 8 years ago to "capitalize on the burgeoning capsuleer space infrastructure market", I'm not sure how the cluster should view the organizations expansion into clones. I'm all for not allowing the Amar to dominate the clone market. But is the Upwell Consortium just the lesser of two evils?

I'm going to end the post with a blast from the past. Yes, the first EVE Online video featuring marketing material from Upwell.  And I really can't believe how fast time flies.